High-Risk Growth Portfolio with Single-Focused Diversification and Strong Technology Sector Presence

Risk profile

  • Secure
    Speculative

The risk profile, derived from past market volatility, reflects the level of risk the portfolio is exposed to. This assessment helps align your investments with your financial goals and comfort with market fluctuations.

Diversification profile

  • Focused
    Diversified

The diversification assessment evaluates the spread of investments across asset classes, regions, and sectors. This ensures a balanced mix, reducing risk and maximizing returns by not concentrating in any single area.

What type of investor this portfolio is suitable for

Growth Investors

This portfolio is suitable for an investor with a high-risk tolerance, seeking substantial growth potential and willing to accept significant volatility. Ideal for those with a long-term investment horizon, aiming to maximize capital appreciation rather than income generation. The investor should be comfortable with concentrated sector and geographic exposure, particularly in technology and North America. Such an investor typically has a strong understanding of market dynamics and is prepared to weather short-term fluctuations for the possibility of achieving higher long-term returns.

Positions

  • JPMorgan Nasdaq Equity Premium Income ETF
    JEPQ - US46654Q2030
    32.50%
  • Vanguard S&P 500 ETF
    VOO - US9229083632
    32.50%
  • Schwab U.S. Large-Cap Growth ETF
    SCHG - US8085243009
    30.00%
  • GraniteShares 1.5x Long NVDA Daily ETF
    NVDL - US38747R8271
    2.50%
  • YieldMax NVDA Option Income Strategy ETF
    NVDY - US88634T7744
    2.50%

The portfolio comprises a mix of ETFs with a heavy focus on U.S. equities. It shows a strong inclination towards growth-oriented investments, evidenced by the inclusion of Schwab U.S. Large-Cap Growth ETF and Vanguard S&P 500 ETF, both holding significant weight. The presence of leveraged and options-based ETFs like GraniteShares 1.5x Long NVDA Daily ETF and YieldMax NVDA Option Income Strategy ETF adds an element of risk. This composition suggests a strategy aimed at capitalizing on growth potential but with a concentrated focus that could expose the portfolio to higher volatility.

Warning The historical data covers less than 2 years, which reduces the confidence in the calculated values.

Growth

Historically, the portfolio has delivered an impressive CAGR of 45.0%, indicating robust growth over time. However, it's important to note the maximum drawdown of -17.18%, which highlights the potential for significant losses during market downturns. The fact that 90% of the returns are concentrated in just 19 days underscores the portfolio's volatility and reliance on market timing. While the past performance is strong, it also suggests that the portfolio is susceptible to rapid fluctuations, which may not suit all investors' risk appetites.

Warning Due to limited historical data, this may show extreme values that are not realistic.

Projection

Using a Monte Carlo simulation with 1,000 iterations, the portfolio's future performance was projected, assuming a hypothetical initial investment. The results show a wide range of potential outcomes, with the 5th percentile yielding a 36,780.59% return and the 67th percentile reaching 1,599,460.6%. The median outcome suggests substantial growth, with a 50th percentile return of 718,171.39%. While all simulations returned positively, the annualized return of 105.31% indicates high potential gains but also reflects significant risk, aligning with the portfolio's growth classification.

Asset classes

  • Stocks
    89%
  • No data
    5%
  • Bonds
    2%
  • Cash
    1%

The portfolio is heavily weighted towards stocks, making up 89.49% of the total allocation. This stock-heavy allocation aligns with the growth-oriented strategy but also increases the portfolio's exposure to market volatility. Bonds and cash make up a small portion, providing minimal diversification benefits. The presence of a "NotClassified" category suggests some ambiguity in asset classification, which could complicate risk assessment. To balance risk, consider diversifying by increasing exposure to bonds or other asset classes that can provide stability during market downturns.

Sectors

  • Technology
    40%
  • Telecommunications
    12%
  • Consumer Discretionary
    11%
  • Health Care
    10%
  • Financials
    6%
  • Industrials
    5%
  • Consumer Staples
    4%
  • Energy
    2%
  • Basic Materials
    2%
  • Utilities
    1%
  • Real Estate
    1%

The portfolio's sector allocation is predominantly skewed towards technology, which constitutes 40.48% of the holdings. This heavy concentration in a single sector exposes the portfolio to sector-specific risks, such as regulatory changes or technological disruptions. While sectors like Communication Services and Consumer Cyclicals are also represented, their impact is comparatively minor. To mitigate sector risk, consider diversifying across a broader range of industries, reducing reliance on technology, and enhancing resilience against sector-specific downturns.

Regions

  • North America
    94%
  • Europe Developed
    1%
  • Latin America
    0%
  • Asia Developed
    0%

Geographically, the portfolio is overwhelmingly concentrated in North America, accounting for 93.82% of the allocation. This focus on a single region increases vulnerability to regional economic and political shifts. Minimal exposure to Europe Developed, Latin America, and Asia Developed suggests limited geographic diversification. Expanding investments into other regions could help reduce geographic risk and capture growth opportunities in diverse markets. A more balanced geographic allocation can enhance the portfolio's resilience and potential for returns across different economic cycles.

Redundant positions

  • Schwab U.S. Large-Cap Growth ETF
    Vanguard S&P 500 ETF
    JPMorgan Nasdaq Equity Premium Income ETF
    High correlation
  • GraniteShares 1.5x Long NVDA Daily ETF
    YieldMax NVDA Option Income Strategy ETF
    High correlation

The portfolio's assets exhibit high correlations, particularly within two groups: Schwab U.S. Large-Cap Growth ETF, Vanguard S&P 500 ETF, and JPMorgan Nasdaq Equity Premium Income ETF; as well as GraniteShares 1.5x Long NVDA Daily ETF and YieldMax NVDA Option Income Strategy ETF. High correlation means these assets tend to move in the same direction, which can amplify both gains and losses. To reduce portfolio risk, consider incorporating assets with lower correlations, which can help smooth out returns and provide a buffer against market volatility.

Dividends

  • JPMorgan Nasdaq Equity Premium Income ETF 9.50%
  • GraniteShares 1.5x Long NVDA Daily ETF 2.20%
  • YieldMax NVDA Option Income Strategy ETF 74.80%
  • Schwab U.S. Large-Cap Growth ETF 0.40%
  • Vanguard S&P 500 ETF 1.20%
  • Weighted yield (per year) 5.52%

The portfolio offers a total dividend yield of 5.52%, with significant contributions from YieldMax NVDA Option Income Strategy ETF at 74.8% and JPMorgan Nasdaq Equity Premium Income ETF at 9.5%. While high dividend yields can provide a steady income stream, they may also indicate higher risk, especially if they stem from options-based strategies. Investors seeking income should assess the sustainability of these yields and consider diversifying with more stable dividend-paying assets to ensure consistent income without excessive risk exposure.

Ongoing product costs

  • JPMorgan Nasdaq Equity Premium Income ETF 0.35%
  • GraniteShares 1.5x Long NVDA Daily ETF 1.15%
  • YieldMax NVDA Option Income Strategy ETF 1.01%
  • Schwab U.S. Large-Cap Growth ETF 0.04%
  • Vanguard S&P 500 ETF 0.03%
  • Weighted costs total (per year) 0.19%

The total expense ratio (TER) of the portfolio stands at 0.19%, which is relatively low and cost-effective. However, individual ETFs like GraniteShares 1.5x Long NVDA Daily ETF and YieldMax NVDA Option Income Strategy ETF have higher costs at 1.15% and 1.01%, respectively. These higher fees can erode returns over time, especially in volatile markets. To maintain cost efficiency, consider evaluating the cost-benefit ratio of these high-fee ETFs and explore lower-cost alternatives that align with the portfolio's growth objectives without compromising on potential returns.

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